frugality: aggreko gas prices heating
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The Torygraph tells us, shock, horror, that fuel prices are going up by about 10% this winter, and the Grauniad is up in arms about ‘Millions of householders face record high heating bills this winter‘. Well there’s a surprise. Here’s news for you. Energy costs are always going to go up higher than the rate of inflation. The reason for that is that we keep on adding energy users to the world, and while we’re at it we haven’t been that hot at finding new oil deposits either. So we have an end of cheap oil. We’ve probably also passed peak oil too, and the price mechanism is there to ration demand in a capitalist system…
A quick glance at this chart from the Grauniad is enough to show the enemy. This is not going to a good place. It’s not quite as bad as it looks because the graph is linear, not logarithmic and you have to mentally compute the ratio of inflation to gas price. It confirms my recollection that energy prices used to be higher than they are now in the early 1980s. People have become used to the price suckout since the early 1990s to 2006 which is why there is such a massive keening noise about this at the moment, but it isn’t actually anything new.
There are some that say that’s no bad thing what with global warming, and others that say it’s all a conspiracy to rack up our bills to pay for this that and the other. Ofgem even threatens us with blackouts, pity that Aggreko has such a crappy yield and a shockingly high P/E these days. Others jab a finger at the current great white hope for Business As Usual, fracking. This has reduced natural gas prices in the United States. Maybe it will make gas too cheap to meter, now where have we heard that before?
Now we have hard nuts like Rob who lived in Edinburgh for three years without running the heating. You can do that, indeed I did it as a student and early householder, but Ermines get used to some creature comforts after a while. The aim is to stay warm, just not to pay British Gas or anyone else for it.
Gas is convenient, but not the only way…
The way to do this is to look back in time. Gas central heating is dandy and very convenient, it comes on in the morning without having to do anything. It came to Britain in the 1970s, with our draughty single-glazed housing stock, and very welcome it was too, no more freezing cold house when the alarm went off in the morning. However, modern houses, or rather houses insulated to modern specs, hold their heat reasonably well overnight, so that’s not a critical as it was in the 1970s.
Before central heating, people used primarily coal on open fires to heat their houses, though they would also use free-standing paraffin heaters and the like. ‘Elf ‘n saftey has probably done for those these days, and that’s not necessarily such a bad thing. However, people also used wood, particularly in more rural areas. Wood runs with the zeitgeist because it is considered a renewable resource.
Mrs Ermine was instrumental in getting the Ermine household to secede from Big Oil as far as domestic heating is concerned, and we got a log burner, looking for one that is reasonably efficient (~70% apparently) and also capable of running coal. So far it has only run wood. The old boy Karl Marx was right on the money when he said that you need to get control of the means of production, and when it comes to heating that means insourcing. Indeed, there is a more general case here – insourcing is a large part of the solution to not getting ripped off in a lot of areas of life Some of these fall into the class of non-financial investments, land, fruit trees, facilities and energy saving steps like insulation fall into this category, and good asset allocation requires a spread of investment classes.
Wood is a low energy-density fuel
Wood is a tremendously low-energy density fuel compared to coal. What that means is that it’s big and heavy for the amount of heat you get from it. You really want to get your wood locally, otherwise you are going to be paying a lot to shift it to your fireplace. We use wood from the locality, either from the hedgerows at the Oak Tree, where we plant ash replacements for the 1970s dead elms, but we also acquire some as cordwood from a local tree surgeon. The low density does have some advantages. In more rural areas of Suffolk, it has been known for people in the sticks who use diesel oil for heating to lose a thousand pounds worth of heating oil overnight. It is easy enough to steal if you can get a Transit van nearby, what people do is lower an electric pump into the tank and pump the oil into a tank in the Transit or disguised in a horsebox. It’s unlikely to be a horse occupying that horsebox if you spot one at night The low energy density of wood means it’s harder to run off with a load of wood, particularly if it’s stored as cordwood lengths that need chainsawing to be usable. Those on mains gas don’t have this problem because gas is delivered on demand, and it’s kinda obvious if someone half-inches a Zeppelin full of it or runs an LPG plant next to your house.
Wood is a fair amount of work if you don’t want to pay for it
Processing wood always catches us a little bit on the hop around this time of year because it is time consuming and a fair amount of work. Of course the easy way to do this is to pick up the phone and order up a ton of logs delivered by tipper truck. However, basic economic theory says that as the price of something like gas goes up, people will drive the price of alternatives up, and this is visible in the price of logs. The demand also seems to have caught suppliers out, as people observe that ‘seasoned logs’ tend to need another season to dry out properly. This is why you should buy your logs in Spring and stash them in a covered log store that air can permeate, to get some chance to dry them out under your control.
In the end saving £700 is always going to be some work – we didn’t use the central heating for heating, only for hot water last year, and the aim is to do the same this year. I also don’t know where Ofgem get their £700 figure from as most ex-colleagues paid a lot more than that. I used to pay £400 a couple of years ago but it is very hard to track this now because monthly direct debit with annual bills is the demon spawn for accountability. I am beginning to wonder if investing the money I have on depost with EDF would not save me more than the money saved for direct debit.
Gas prices have increased since the last time I used gas 100% for heating. You can see the downtrend since 2008 as this started to knock out some of my usage, and it saves us at current prices about £500 a year. The payback time is about six years at current rates. This may be shortened however, because fuel costs are rising, and the independence of the fossil fuel price means this is something that concerns us less. A fire is more convivial too – it’s difficulat to place a monetary value on the differetn feeling of a glass or two of red wine shared with others around the flickering flames and direct heat.
This year we are breaking out into two new firewoood sources. One is locally nonrenewable though globally renewable. It was hasta la vista to the trusty Ikea sofas that served me well since bachelor days as we bought nice replacements secondhand from a friend moving to Canada. There’s a reasonable amount of pine in there, and with a jigsaw mounted in a Workmate that was quickly rendered to firewood. Yeah, I know I should use a table saw but I don’t have one.
The second more renewable resource is pallets, which we have been collecting over the summer. A little bit of me weeps when I see people burning pallets as waste on a site, because these can be used inside a wood burner to provide useful winter heating, and it’s generally a waste. Many people are glad to be shot of them.
There is no power at the Oak Tree but using a car battery and a Handy Mains inverter the jigsaw served me well again. We can fit a pallet whole into our van but for those who need to cut them up a bit that’s one way to do it on site. You can get battery powered jigsaws or reciprocating saws but I don’t really get on with cordless tools other than cordless drills. They’re either gutless, expensive or both, and the batteries never last as long as they should do. When they get knackered, due to a conspiracy by the manufacturers the battery packs have become obsolete and new ones won’t fit. As a result the cost of a new battery is the same as a replacement too.
Mr Money Mustache seems to rave about battery tools but he is a real carpenter and I am probably cheap Perhaps in America they have laws to stop the manufacturers changing the shape of the batteries every two years, which is about the time it takes to wreck one with heavy use.
Using an inverter and a leisure battery has transformed wrangling pallets on site. You should monitor the battery voltage and avoid letting it fall below 10.5V on full load, though modern inverters usually have a low-voltage cutout. I don’t know if mine does, you get a lot of jigsawing out of a leisure battery. Decent connections matter too – a 350W tool is looking for about 33A at 12V. That terminal block probably wants to be replaced with a soldered connection at some stage. The jigsaw should be a low-tech on-off unit with a universal motor (one where you see occasional sparks from the commutator at the back) for best results with a inverter… Having said that, the Scorpion reciprocating saw I also use has an electronic speed controller but works fine.
There are two ways of tackling a pallet with a jigsaw – either slice through the runners at the bottom to make it easier to pry apart the planks, or do that, rest the pallet against a stack of logs and bash seven bells out of it with a sledgehammer, which if targeted right breaks the planks out from the middle purlins. You need to use eye and ear protection and be ready to duck until you have the hang of it. The trick is to aim into the plank along the line of the nails.
Obviously the combination of power tools and a planks with nails and a sledgehammer is kinda dangerous and you should take due care and attention
Pallet wood goes a treat and works well with some logs, the fast-burning pallet yang works with the yin of a slower burning log. We don’t bother having the nails out. If you are going to use the ash for something, like Mrs Ermine does at The Oak Tree, you can either sieve the buggers out, pick ‘em out have them out with a loudpeaker magnet. They have their own rustic aesthetic charm. I presume that being annealed through the fire they are pretty useless for their original purpose.
Another recent discovery is that pine cones make excellent kindling if you dry them out for a short while. We do this in a mesh container in the south-facing porch – heating the cones up opens them out as well as drying them. I did wonder if there were issues with resin but it seems they are no worlse than burning pine wood. And they deliver. Chopping up wood for kindling with an axe is tedious compared to a stroll in the wood for cones, and a little bit goes a long way.
As a result of this, there are no plans to allow icicles to form on the tips of the Ermine’s fur in the winter, and he need not be fleeced by the power companies either. Or harassed the Russkies having their occasional barney with the Ukraine. The latter would still get in my way because about half of the UK’s power is generated with gas. Although I do have a standalone 12V solar lighting system capale of running through the shortest day, I would need to use the 12V party audio amplifier for entertainment through the long dark nights promised by OfCom for the years ahead. Al least I’ve fixed my portable CD player, but to be honest the car audio amplifer sounds rough as guts for use indoors, so perhaps I should look out for a decent 50W secondhand car CD player. And buy those damn Aggreko shares with some of the savings on gas
added 22 Oct It seems not everyone has as much luck with a wood burning stove as I did – I’ve tried to bring out some of the things that help this for for me in a follow-up post.